UPDATE 1-EXCLUSIVE-Russia steps up military lifeline to Syria's Assad -sources

* Several sources report deliveries of weapons, equipment
since December

* Dozens of Russian transport planes bringing equipment
-source

* Russian spy drones help Assad to track and attack rebels
-sources
(Adds U.S. comment in paragraphs 10 and 11)

By Jonathan Saul

LONDON, Jan 17 In recent weeks Russia has
stepped up supplies of military gear to Syria, including
armoured vehicles, drones and guided bombs, boosting President
Bashar al-Assad just as rebel infighting has weakened the
insurgency against him, sources with knowledge of the deliveries
say.

Moscow, which is trying to raise its diplomatic and economic
influence in the Middle East, has been a major provider of
conventional weapons to Syria, giving Assad crucial support
during the three-year civil war and blocking wider Western
attempts to punish him with sanctions for the use of force
against civilians.

The new Russian supplies come at a critically fluid stage of
the conflict, with peace talks scheduled for next week in
Switzerland, the factious opposition losing ground, and Western
support for the rebellion growing increasingly wary of the role
played by foreign militants. Syria has even said some countries
formally opposed to Assad have begun discussing security
cooperation with his government.

Several sources told Reuters that Assad's forces had since
December received deliveries of weaponry and other military
supplies, including unmanned spy drones known as UAVs, which
have been arranged by Russia either directly or via proxies.

"Russian advisers and intelligence experts have been running
observation UAVs around the clock to help Syrian forces track
rebel positions, analyse their capabilities, and carry out
precision artillery and air force strikes against them," said
the source, who declined to be identified.

Vyacheslav Davidenko, spokesman for Russia's arms export
monopoly Rosoboronexport, said they could not comment on arms
deliveries to Syria.

Russia has said it violates no international laws with its
military supplies to Syria and does not sell Damascus offensive
weapons.

Syrian officials could not be reached for comment.

The U.S. State Department said it had no independent
confirmation that Russia had increased military supplies to
Syria but said such actions would be concerning if true.

Spokeswoman Jen Psaki said she discussed the Reuters report
with Secretary of State John Kerry earlier on Friday.

"His view is that if these reports are true that would
certainly raise great concerns about the role that Russia is
playing in continuing to enable the Assad regime of brutalizing
the Syrian people," said Psaki, adding: "We don't have
independent confirmation of the reports."

LUCRATIVE CONTRACTS

A source within the international arms industry with
knowledge of Middle Eastern weapons movements also confirmed a
pick-up in supplies to Assad's forces, including UAVs.

"Equipment has been moving into Syria, and Russia is either
bringing it in themselves or sourcing supplies from Black Sea
areas like Bulgaria, Romania or Ukraine, where there is surplus
stock floating around," the source said. "Suppliers in that
region cannot afford to upset the Russians."

Arms trackers say Bulgaria, Romania and Ukraine all have
stockpiles of Russian-style light arms that were produced in the
countries dating back to the Soviet era, when factories were set
up with help from Moscow.

A Bulgarian foreign ministry spokesman said Bulgaria's
intergovernmental council, which oversees arms trades, had not
issued any certificates for arms deals destined for Syria.

"We have data that shows that Bulgaria has not authorised
any arms sales to Syria," he said.

Former foreign minister Solomon Passy said it was "very
unlikely" that Bulgaria, as a NATO and EU member, would be
involved in such shipments.

A Ukraine foreign ministry spokesman said the former Soviet
republic had already denied allegations of arms supplies and
transfers last year, when it said Kiev had voluntarily and
completely stopped military and technical cooperation with Syria
since May 2011.

Romania's foreign ministry said its export control
department had not registered or authorised any foreign trade
operations involving military products, including light weapons,
with Syria during 2013 or 2014.

The arms industry source said: "Stuff is definitely coming
into Syria, and Russia realises they have to keep Assad in power
if they want to keep a hold of what they have there, especially
with oil and gas reserves up for grabs."

Russian oil and gas company Soyuzneftegas signed a $90
million deal with Syria's oil ministry in December for oil
exploration and production in a 2,190 square kilometres (845
square miles) bloc of Mediterranean waters off the Syrian coast
between Tartous and Banias.

Syrian oil officials say they are confident their waters
hold significant oil or gas reserves, pointing to substantial
discoveries in the eastern Mediterranean off Israel and Cyprus
and promising surveys carried out in the waters of Lebanon.

Moscow says its Middle East diplomacy is based on standing
up for the principles of international law and upholding the
role of the United Nations.

The situation also offers Russia an opportunity to show it
still has weight on the world stage and to win potentially
lucrative contracts once the fighting is over in Syria and the
dispute over Iran's nuclear programme ends.

Russia is particularly keen to establish and keep a foothold
in the Middle East through Syria and Iran because it lost out
during the Arab Spring revolutions, particularly in Libya, where
it had backed Muammar Gaddafi.

Reuters last week revealed that Russia is negotiating with
Iran an oil-for-goods swap worth $1.5 billion a month that
threatens to undermine sanctions that helped persuade Tehran to
agree a preliminary deal to curb its nuclear programme.

NEED FOR SUPPLIES

Tom Wallace, of U.S. based non-profit conflict research
group C4ADS, said: "Assad absolutely needs to keep refreshing
his supplies. People's mind most obviously goes to bullets, but
they underestimate what an incredibly heavy logistical burden a
modern mechanised military really is.

"Tank treads, helicopter blades, jet fuel, ball-bearings,
gyroscopes - virtually every component of every piece of
equipment can and will break down without maintenance and/or
replacement."

James Bevan of Conflict Armament Research, who tracks
weapons for governments and other organisations, said Syria's
munitions use had been high for over two years.

"Further evidence of that is that they have been using
barrel bombs dropped out of helicopters, which may suggest that
they are running low on air-launched or air-delivered
munitions," he said.

Britain has accused Syria's government of committing "yet
another war crime" by spraying civilian areas with barrel bombs
- oil drums or cylinders that are packed with explosives and
metal fragments and dropped from aircraft.

BY AIR AND SEA

A Syrian opposition source said some supplies had been
delivered to Syria's Latakia airport around three weeks ago,
with further equipment reaching through the country's major
cargo ports in Tartous and Latakia.

The source said the port of Tartous, which is also the
location of Russia's naval base, had been sealed off for several
hours over three to four weeks ago.

"During the time, non-authorised personnel were not allowed
to enter, and it is a sure sign a delivery came through. This
happens from time to time when supplies come in, usually at
night."

The Middle East security source added: "Given the risk of
rebel attack on arms depots and landing strips at Syrian air
bases, Russia has also been shipping large amounts of small arms
and munitions to Tartous and Latakia, allowing Assad's forces to
keep fighting apace."

C4ADS's Wallace said past shipments of Russian military
cargo had also come by both air and sea.

"Lighter, less sturdy equipment often is loaded onto a
plane, whereas large and heavy shipments typically are loaded
onto a ship of some kind," he said.

"Wheeled vehicles would need to be transported on a roll-on,
roll-off ramped ship, but most smaller stuff could be
containerised and loaded onto a standard cargo ship," said
Wallace, who co-authored a recent report into arms transfers
from Russia and Ukraine. (For a link:
here)
(Additional reporting by Timothy Heritage and Thomas Grove in
Moscow, Tsvetelia Tsolova in Sofia, Pavel Polityuk in Kiev, Radu
Marinas in Bucharest, Dominic Evans in Beirut, and Lesley
Wroughton in Washington; Editing by Will Waterman and Gunna
Dickson)

Next In Oil report

WASHINGTON, Dec 9 The U.S. Agriculture
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and wheat unchanged on Friday, holding usage forecasts for all
three commodities steady with its November outlook.

SOFIA, Dec 9 Bulgaria plans to spend about 1.5
billion levs ($808.63 million)on eight new or second-hand jet
fighters and has asked Italy, Portugal, the United States and
Sweden to make offers to supply them, the defence ministry said
on Friday.